Super Dieters Tea Cases

Filed 8/28/07 Super Dieters Tea Cases CA1/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION THREE

Coordination Proceeding Special Title (Rule 1550(b))

SUPER DIETERS TEA CASES

This is an appeal from an order awarding appellant Christopher Grell $15,000 in attorneys fees after he prevailed on a motion to strike under the SLAPP statute (Code Civ. Proc.,  425.16).[1] Grell, a practicing attorney, contends the trial court erred by not awarding him additional amounts representing the reasonable value of legal work he performed on his own behalf, and attorneys fees and costs he incurred in connection with the underlying SLAPP suit but not the motion to strike. We disagree, and affirm.

FACTUAL AND PROCEDURAL BACKGROUND

Respondent Laci Le Beau, Inc. (Le Beau, Inc.) sued Grell for trade libel, libel per se and intentional interference with prospective economic advantage, alleging Grell made disparaging statements that respondents product, Super Dieters Tea, contributed to his wifes death. After filing an answer, Grell moved to dismiss the case under section 425.16 and, alternatively, for summary judgment. The trial court granted his motion, at which point Grell moved to recover attorneys fees and costs.

The trial court granted Grells motion for attorneys fees and costs in part and denied it in part. Specifically, the trial court awarded Grell $15,000 for legal work performed on his behalf by his retained counsel, Ian Dillon, in connection with the SLAPP motion to strike. The trial court declined, however, to award Grell additional amounts representing the reasonable value of legal work he performed on his own behalf while acting in propia persona, or attorneys fees and costs he incurred in connection with the SLAPP suit itself (for example, fees and costs incurred in moving for summary judgment), but not in connection with the SLAPP motion to strike.

Grell then moved for reconsideration, which the trial court denied, and this appeal followed.

DISCUSSION

Grell claims the trial court erred in declining to award him: (1) the reasonable value of attorneys fees for legal work he provided himself in defending against the SLAPP suit in propia persona; and (2) attorneys fees and costs incurred for legal work performed in connection with his defense in the lawsuit but not in connection with his SLAPP motion to strike. We address each alleged error in turn.

I. Grell Is Not Entitled to Recover Attorneys Fees for Legal Work He Performed on His Own Behalf.

Section 425.16, the SLAPP statute, was enacted in 1992 in response to a disturbing increase in lawsuits brought for the strategic purpose of chilling a defendants rights of petition and free speech. ( 425.16, subd. (a).) SLAPPs are meritless lawsuits brought primarily to harass persons who have exercised their constitutionally protected rights of free speech and petition. (Dowling v. Zimmerman (2001) 85 Cal.App.4th 1400, 1424.) The SLAPP statute sets forth a procedure designed to expeditiously resolve SLAPPs at an early stage of the litigation before litigation costs escalate. (Ibid.; Kibler v. Northern Inyo County Local Hospital Dist. (2006) 39 Cal.4th 192.) Specifically, the statute provides in relevant part: A cause of action against a person arising from any act of that person in furtherance of the persons right of petition or free speech under the United States or California Constitution in connection with a public issue shall be subject to a special motion to strike, unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim. ( 425.16, subd. (b)(1).)

The express purpose of the statute is to encourage continued participation in matters of public significance and to prevent the chill[ing] of such participation through abuse of the judicial process. ( 425.16, subd. (a).) To ensure that purpose is met, the California Legislature amended the statute in 1997 to mandate that it be construed broadly. (Ibid., as amended by Stats. 1997, ch. 271, 1; see also Ketchum v. Moses (2001) 24 Cal.4th 1122, 1130.)

In addition, and most relevant here, the statute provides that a prevailing defendant on a [SLAPP] motion to strike shall be entitled to recover his or her attorneys fees and costs. ( 425.16, subd. (c).) Our Supreme Court has explained this statutory fee shifting provision as follows:

[U]nder Code of Civil Procedure section 425.16, subdivision (c), any SLAPP defendant who brings a successful motion to strike is entitled to mandatory attorney fees. The fee-shifting provision was apparently intended to discourage such strategic lawsuits against public participation by imposing the litigation costs on the party seeking to chill the valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances. (Id., subd. (a).) The fee-shifting provision also encourages private representation in SLAPP cases, including situations when a SLAPP defendant is unable to afford fees or the lack of potential monetary damages precludes a standard contingency fee arrangement. (Ketchum, supra, 24 Cal.4th at p. 1131.)

In determining whether a litigant has a right to attorneys fees and costs under section 425.16, subdivision (c), the courts duty is to determine and effectuate the Legislatures intent in enacting the statute. (Rosenaur v. Scherer (2001) 88 Cal.App.4th 260, 282.) Accordingly, under well-established rules of statutory construction, the court must look first to the statutes language.  Words used in a statute . . . should be given the meaning they bear in ordinary use. [Citations.] If the language is clear and unambiguous there is no need for construction, nor is it necessary to resort to indicia of the intent of the Legislature . . . . (Lungren v. Deukmejian (1988) 45 Cal.3d 727, 735.)  If the language permits more than one reasonable interpretation, however, the court looks to a variety of extrinsic aids, including the ostensible objects to be achieved, the evils to be remedied, the legislative history, public policy, contemporaneous administrative construction, and the statutory scheme of which the statute is a part. [Citation.] (Wilcox v. Birtwhistle [(1999) 21 Cal.4th 973,] 977.) (S.B.Beach Properties v. Berti (2006) 39 Cal.4th 374, 379.)

Here, Grell contends he was entitled to an award of attorneys fees that included compensation for his own legal work performed in representing himself in propia persona in connection with the SLAPP motion to strike. In so contending, Grell argues the same policy considerations that led the Legislature to adopt the SLAPP statute require the courts to interpret subdivision (c) of the statute to permit prevailing defendants who are attorneys acting in propia persona to recover reasonable attorneys fees and costs.

Le Beau, Inc. disagrees, pointing to well-established California case law declining to permit recovery of reasonable attorneys fees to attorneys who choose to litigate in propia persona. In particular, respondent relies on a California Supreme Court case holding that attorney litigants acting in propia persona are not entitled to recover attorneys fees under Civil Code section 1717 as compensation for the time and effort expended on their own behalf or for any professional business opportunities they may have foregone due to the self representation.[2] (Trope v. Katz (1995) 11 Cal.4th 274, 292 [Trope].) In so holding, the court noted that the usual and ordinary meaning of the words attorneys fees, both in legal and in general usage, is the consideration that a litigant actually pays or becomes liable to pay in exchange for legal representation. (Id. at p. 280.) The court further noted that no basis existed under California law for treating attorney litigants preferentially by permitting them to recover reasonable attorneys fees for their self representation but not permitting lay litigants to do so. (Id. at p. 285.)

Recently, our Supreme Court affirmed Tropes holding, and clarified that it hinged on the existence of an attorney-client relationship, which the term attorneys fees implies, not on whether a litigant incurs fees on a fee-for-service basis. (PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1092, 1097, fn. 5.) Permitting a prevailing party represented by in-house counsel to recover attorneys fees under Civil Code section 1717, the court noted: There is no problem of disparate treatment; in-house attorneys, like private counsel but unlike pro se litigants, do not represent their own personal interests and are not seeking remuneration simply for lost opportunity costs that could not be recouped by a nonlawyer. A corporation represented by in-house counsel is in an agency relationship, i.e., it has hired an attorney to provide professional legal services on its behalf. Nor is there any impediment to the effective and successful prosecution of meritorious claims because of possible ethical conflict or emotional investment in the outcome. The fact that in-house counsel is employed by the corporation does not alter the fact of representation by an independent third party. Instead, the payment of a salary to in-house attorneys is analogous to hiring a private firm on a retainer. (PLCM Group, Inc. v. Drexler, supra, 22 Cal.4th at p. 1093.)

Acknowledging Tropes holding, Grell nonetheless contends it does not apply where the self-represented litigant seeking attorneys fees is an attorney who successfully defeats a SLAPP motion to strike under section 425.16. Grell reasons that, contrary to section 1717, a contract case statute, section 425.16 provides important public benefits, including the restoration of the publics confidence in participatory democracy. Grell also points out that section 425.16, subdivision (c) serves as a deterrent and punishment for plaintiffs who file meritless lawsuits.

Recent court decisions, however, have confirmed the Trope rule indeed applies to cases arising under section 425.16. In Witte v. Kaufman (2006) 141 Cal.App.4th 1201 [Witte], the Third District Court of Appeal held that two litigants, an attorney and a law firm, were not entitled to attorneys fees under section 425.16, subdivision (c) despite prevailing in a motion to strike brought pursuant to section 425.16 because the attorney and the law firm were each representing their own legal interests. (Witte, supra, 141 Cal.App.4th at pp. 1210-1211.) In so holding, the court found dispositive the fact that, as in Trope, no attorney-client relationship existed upon which to base an award of attorneys fees. (Id. at p. 1211.) Rather, the attorney represented himself and the law firm represented itself, albeit through appearances by its attorneys, in connection with the SLAPP motion to strike. (Id. at pp. 1210-1211.)

Likewise, in Ramona Unified School Dist. v. Tsiknas (2005) 135 Cal.App.4th 510, the existence of an attorney-client relationship was held dispositive where attorneys fees were sought by defendants who had prevailed on their SLAPP motion to strike. In affirming an award of such fees to the defendants, the Fourth Appellate District, Division One explained: Where an attorney-client relationship exists, the courts uniformly allow for the recovery of attorney fees under Civil Code section 1717. [Citations.] [[]] Cases that have allowed the recovery of attorney fees under the anti-SLAPP statute are similarly marked by the existence of an attorney-client relationship. [Citations.] [[]] This decisional authority and the plain language of section 425.16, subdivision (c) support the conclusion that the commonly understood definition of attorney fees applies with equal force to section 425.16 and a prevailing defendant is entitled to recover attorney fees if represented by counsel. (Ramona Unified School Dist. v. Tsiknas, supra, 135 Cal.App.4th at pp. 524 [permitting recovery of attorneys fees where outside counsel represented all prevailing defendants in connection with the motion to strike and one of the defendants who was also an attorney provided legal assistance to the nonattorney codefendants]; see also Rosenaur, supra, 88 Cal.App.4th at p. 283 [permitting recovery of attorneys fees accrued by outside counsel representing a party on a partial pro bono basis]; Dowling, supra, 85 Cal.App.4th at p. 1425 [permitting recovery of attorneys fees to compensate outside counsel for services rendered in connection with the motion even though prevailing defendant initially appeared in the SLAPP action in propia persona].)

Following this case law, we conclude an award of attorneys fees under section 425.16, subdivision (c) must be based on an attorney-client relationship between the prevailing defendant and the attorney whose services generated the fees. Moreover, because the additional attorneys fees sought by Grell are not based on such relationship, the trial court properly declined to award them. We thus affirm the trial courts order in this regard.

II. Grell Is Not Entitled to Recover Attorneys Fees and Costs Incurred For Legal Work Unrelated to the SLAPP Motion to Strike.

Grell further contends the trial court erred in declining to permit him to recover attorneys fees and costs incurred for legal work unrelated to the SLAPP motion to strike but nonetheless related to his defense in the SLAPP suit. In doing so, Grell acknowledges that our colleagues in the Court of Appeal, First District, Division Five, have held otherwise. (Lafayette Morehouse, Inc. v. Chronicle Publishing Co. (1995) 39 Cal.App.4th 1379, 1383 [concluding the Legislature intended that a prevailing defendant on a motion to strike [under section 425.16] be allowed to recover attorney fees and costs only on the motion to strike, not the entire suit] [Lafayette Morehouse].) Grell contends, nonetheless, that Lafayette Morehouse is no longer good law, having been effectively overruled by the 1997 amendment to section 425.16 which expressly mandates that the statute be construed broadly. ( 425.16, subd. (a), as amended by Stats. 1997, ch. 271,  1; see also Ketchum, supra, 24 Cal.4th at p. 1130.)

We again disagree. First, Grell points us to nothing in the legislative history of section 425.16 or its 1997 amendment that evidences an intent to overrule Lafayette Morehouse or to mandate recovery of all attorneys fees and costs incurred by a prevailing defendant in connection with a SLAPP suit, rather than just those incurred in connection with the SLAPP motion to strike.To the contrary, our California Supreme Court has explained the 1997 amendment apparently was prompted by judicial decisions . . . that had narrowly construed [ 425.16] to include an overall public issue limitation [i.e. a limitation of the statute to protect only statements or writings on public issues]. (See Stats. 1997, ch. 271,  1; Zhao v. Wong [(1996)] 48 Cal.App.4th [1114,] 1128 [disagreeing that the statute was meant to have broad application]; Linsco/Private Ledger, Inc. v. Investors Arbitration Services, Inc. [(1996)] 50 Cal.App.4th [1633,] 1638 [opining that the statute must be given a narrow interpretation].) (Briggs v. Eden Council for Hope & Opportunity (1999) 19 Cal.4th 1106, 1120.)

The California Supreme Court went on to explain: The Assembly Judiciary Committees analysis of the amendatory legislation confirms the amendment was intended specifically to overrule Zhao v. Wong and the Court of Appeals decision in this case. (See Assem. Com. on Judiciary, Analysis of Sen. Bill No. 1296 (1997-1998 Reg. Sess.) for July 2, 1997, hg., pp. 3-4 [stating proponents have provided ample evidence that the states courts of appeal are issuing conflicting opinions about the breadth of Section 425.16, noting that Averill v. Superior Court [(1996)] 42 Cal.App.4th 1170, Church of Scientology v. Wollersheim [(1996)] 42 Cal.App.4th 628, and Braun v. Chronicle [(1997)] 52 Cal.App.4th 1036 have construed the statute broadly, while Zhao v. Wong, supra, 48 Cal.App.4th 1114, and the Court of Appeal in this case have construed it very narrowly, and stating Sen. Bill No. 1296 would clarify the Legislatures intent that the provisions of Section 425.16 be construed broadly].) (Briggs, supra, 19 Cal.4th at pp. 1120-1121.)

Moreover, California Supreme Court authority since the 1997 amendment has drawn a contrary conclusion from its examination of the statutes legislative history. Interpreting subdivision (c) within the context of section 425.16s legislative history, the Supreme Court noted that the fee provision [under section 425.16] applies only to the motion to strike, and not to the entire action. (S.B. Beach Properties v. Berti (2006) 39 Cal.4th 374, 381 [S.B. Beach Properties], citing Sen. Com. on Judiciary, Analysis of Sen. Bill No. 1264 (1991-1992 Reg. Sess.) and Lafayette Morehouse, supra, 39 Cal.App.4th at p. 1384.)

The court in S.B. Beach Properties was addressing the unrelated issue of whether defendants who failed to file a SLAPP motion to strike before the voluntary dismissal of all causes of actions against them could recover fees or costs under section 425.16, subdivision (c). (S.B. Beach Properties, supra, 39 Cal.4th at p. 377.) And as Grell correctly points out, a decision is authority only for issues actually involved and actually decided. (GoldenGatewayCenter v. Golden Gateway Tenants Assn. (2001) 26 Cal.4th 1013, 1029.) Nonetheless, we conclude the California Supreme Courts examination of the legislative history of section 425.16, subdivision (c) the same provision with which we are concerned is highly persuasive. Accordingly, consistent with the California Supreme Courts statement in S.B. Beach Properties, we conclude the fee provision under section 425.16 applies only to the motion to strike, and not to the entire action.

We thus affirm the trial courts order permitting Grell to recover attorneys fees he incurred in connection with the motion to strike for legal work performed by his retained counsel, but not all fees and costs he incurred in connection with the SLAPP action.

DISPOSITION

The trial courts order is affirmed.

_________________________

Horner, J.*

We concur:

_________________________

McGuiness, P. J.

_________________________

Siggins, J.

Publication courtesy of San Diego free legal advice.

Analysis and review provided by Santee Property line Lawyers.

* Judge of the Alameda County Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.

[1] SLAPP is an acronym for Strategic Lawsuit Against Public Participation. (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1127.) Unless otherwise stated, all further statutory references are to the Code of Civil Procedure.

[2] Civil Code section 1717 provides in relevant part: In any action on a contract, where the contract specifically provides that attorneys fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract . . . shall be entitled to reasonable attorneys fees in addition to other costs. ( 1717, subd. (a).)